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Do regional identities determine different levels of FDI-induced growth? This paper analyses the impact of FDI on the growth rates of European regions. In so doing, it discusses the role of different components of territorial capital in magnifying or daunting such an impact. The paper starts from a very simple theoretical framework that clarifies how territorial capital can shape the returns to foreign direct investments. The subsequent empirical analysis uses data from the European Value Study to identify 3 soft components of territorial capital that define the identity of a region and can be relevant in shaping the impact of foreign capital on local growth. Using data from Eurostat and FDI regio database, the paper studies the impact of FDI induced spillovers on regional growth in European regions, controlling for possible endogeneity. Results indicate that technological spillovers are an important source of regional growth, but they take place only if the level of trustworthiness/generalized morality is widespread in the region, supporting the idea that low free-riding attitudes increase efficiency of transaction and effectiveness of cooperation between multinational and the regional economic system. The effect of relational capital is more ambiguous. A more disaggregated analysis reveals that some effects vary depending on the origin (intra vs extra European FDI) and on the type of economic activity (manufacturing vs service FDI).

We empirically assess the relationship between cultural assimilation and subjective well-being of immigrants by using the German Socio-Economic Panel, a longitudinal dataset including information on both the economic and non-economic conditions of the respondents. We find that the more immigrants identify with the German culture and fluently speak the national language, the more they report to be satisfied with their lives. This result is robust to several potential confounding factors, including a large number of individual variables (demographic, educational, social, economic and health), labour market outcomes and the external social conditions of the immigrant.

The idea that culture is a determinant of economic outcomes has regained in recent economic literature its full recognition. In this perspective, this analysis aims at discussing the impact of cultural diversity on economic outcomes and disentangling the mechanisms through which economic forces of globalization (trade, migration and capital flows) interplay with local cultural identities. Note that the analysis has a specific geographical focus, i.e.: European countries. The choice of Europe as target of the analysis depends on two main considerations: cultural issues are particularly important for the socio-economic success of European Union and cultural diversity is a funding element of Europe. Culture and cultural diversity are thus two important elements of European societies, but why should they matter in an economic perspective? The analysis that follows gives three main answers to this question. First of all, some of our economic choices and actions as consumers can have important fallouts on cultural diversity and on the possibility of cohabitation of different cultures. Secondly, some economic phenomena can have a cultural content, such as trade in cultural goods. For this reason they can become a vehicle for intercultural exchange, fostering tolerance towards immigrants and easing the success of multicultural societies. Finally, different local cultural identities can act as a filter for economic phenomena such as foreign investments, magnifying or destroying the growth enhancing effect of economic globalization. These three explanations are discussed and analyzed in the three chapters of the thesis.

This study investigates the factors that drive the distribution of foreign direct investments (FDI) into European regions, trying to disentangle the spatial complexity of this economic relationship. In particular, we argue that regions' capacity to attract FDI is affected by own-country effects, which can take two different forms: the first relates to the relative performance of the country a region belongs to in Europe (between country effect) while the second concerns the relative performance of regions' within their own countries (within country effect). We find that own country effects exist, though the within country effect is weaker than the between country effect. The absolute performance of countries is able to affect that of their own regions along many axes, on top of region?s absolute performance. When modelling spatial interactions and spillovers, it also emerges a clear pattern of territorial competition among regions in attracting FDI.